The Department of Telecommunications has set a clear target. It aims to complete the reassessment of Vodafone Idea's adjusted gross revenue dues by the end of February. This follows the government's decision to freeze the amount at ₹87,695 crore.
Reassessment Timeline and Process
In a letter dated 15 January, the DoT informed its field units and the company about this timeline. The department has already started the detailed reassessment work. This exercise covers the financial years from 2007 to 2019.
The DoT, along with its regional Controller of Communication Accounts offices, will conduct this review. These CCAs handle financial checks and verification for telecom operators. They will spend about seven weeks reassessing the licence fees and spectrum usage charges Vodafone Idea paid based on its AGR.
The targeted completion date is 27 February. However, the DoT letter notes this depends heavily on Vodafone Idea's cooperation. The company must provide timely responses and submit all required documents for the process to stay on schedule.
Background: Supreme Court Rulings and Government Relief
This reassessment activity stems directly from Supreme Court rulings in October and November. The court allowed the government to recalculate the company's AGR dues. Acting on this, the Union Cabinet made a key decision on 31 December.
The cabinet approved a relief package for the cash-strapped telecom operator. A central part of this package was freezing the AGR dues at ₹87,695 crore as of the end of December. The government also approved a payment plan allowing Vodafone Idea to clear these frozen dues between the financial years 2032 and 2041.
Details of the Reassessment Mandate
The DoT's letter provides specific instructions for the reassessment. It states that the AGR dues for Vodafone Idea from FY 2006-07 to FY 2018-19 will be reassessed. This excludes dues for FY2017-18 and FY2018-19, which the Supreme Court finalized in September 2020.
The reassessment will apply the Deduction Verification guidelines from 3 February 2020. It will also consider audit reports that were not previously acted upon. The goal is to review all deductions the DoT initially disallowed.
Officials familiar with the matter suggest this exercise could lead to a reduction in the final AGR dues figure for the company. They requested anonymity while sharing this insight.
Financial Impact and Market Reaction
The freeze on AGR dues provides significant near-term relief for Vodafone Idea. Without it, the company would have faced enormous annual installments of about ₹18,000 crore starting this March. The new payment schedule is far more manageable.
Following the freeze, Vodafone Idea's total AGR payment outgo over the six years from March 2026 to March 2031 will be ₹744 crore. This works out to a maximum of ₹124 crore per year. Additionally, the company must pay ₹100 crore annually for four years, from March 2032 to March 2035.
The remaining AGR dues will be paid in equal annual installments over six years, from March 2036 to March 2041. Vodafone Idea confirmed this schedule in an exchange filing on 9 January.
Despite this relief, investor concerns persist. Shares of Vodafone Idea ended 2.5% lower at ₹10.8 each on the National Stock Exchange on Friday.
Ongoing Challenges for Vodafone Idea
Analysts point out that while the AGR freeze helps, major challenges remain. The company still faces spectrum dues of approximately ₹1.17 trillion. There is also uncertainty about the final AGR amount once the reassessment is complete.
Brokerage firm Emkay Global highlighted these issues in a note dated 1 January. It stated that Vodafone Idea has about ₹1.2 trillion in deferred payment obligations for spectrum. Significant payments are scheduled between FY26 and FY44.
The note further explained that the company's current earnings are insufficient to meet capital expenditure needs or spectrum debt repayments. Vodafone Idea will require additional relief or funding to address these financial challenges.
The company had previously warned it might not survive beyond FY27 without raising more funds. Banks have been hesitant to lend without a clear bailout plan or finality on the AGR dues.
Government Stake and Future Outlook
The government now holds a nearly 49% stake in Vodafone Idea. This stake resulted from converting dues worth about ₹53,083 crore into equity. The conversion happened in two tranches, in February 2023 and April 2025.
The reassessment exercise is a critical step. It will determine the final financial burden on Vodafone Idea and shape its path forward in a competitive telecom market.
